Disney’s Iger: We feel confident people will sign up in droves for Disney+

It was the deal that won him “The Simpsons,” and now it seems to have paid off for Chief Executive Officer Bob Iger. Shares of Walt Disney Co. (DIS.N) soared more than 12 per cent Friday, adding about US$25 billion to the company’s market value less than 24 hours after Iger’s strategy reveal for Disney+.

The rally covered more than a third of what media conglomerate paid for 21st Century Fox Inc. With the acquisition now closed, the low-cost streaming service will become home to ‘The Simpsons’ -- a well-known comedy television series originally developed under the Fox umbrella.

Disney’s charge towards Internet TV, and away from the traditional broadcast medium, marks a monumental fork in the road. The shift begs the question: when was the last time a company of this magnitude successfully adapted to an industry disruptor?

Netflix Inc., in this story, was the lead character upending the media industry with its streaming platform and widespread content library. But the insurgence of Disney+ wiped out $8 billion from Netflix’s market value.

While some investors see the new streaming service as a nemesis to Netflix, KeyBanc Capital Market’s Andy Hargreaves sees Disney+ as a bigger problem for Apple Inc., AT&T Inc.’s HBO, CBS Corp.’s Showtime, and other services that don’t have Netflix’s established range of content.

“If you listen to Disney, they’re saying we’re not necessarily going after Netflix,” said Hargreaves in an interview. “We are trying to carve out our own niche based on the quality of IP we have, not necessarily the breadth.”

The rally behind Disney "has legs," said Jahanara Nissar, an analyst at Lynx Equity Strategies, in a text message. "This name was largely ignored by growth investors and now DIS is on their radar post last night’s event. Investors are forced to chase the stock despite today’s strong move."